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We take profit before interest and tax, I suppose gross profit is closer to this definition, but may be this is not appropriate for the question…For waste processing company I am not sure on details of task now, I don’t remember exactly, but it seems to me that the price negotiated was for the first item which was cheaper under ABC.For mark up if original cost is defined as x and than original price is 1.5 * x so reduction of market price is 0.9, reduction of cost is 0.98 so 0.9*1.5*x*0.98=1.323x and current mark up is 32.3 so I chose 35% (the nearest above this figure)
That’s my point of view, but I doubt that I won’t fail the examJune 2016 session was my second attempt to pass F5. First time I was in progress with my studies and failed to finish on time.
MSQs were challenging because of theoretical questions. The LR was 75%. Target mark-up I suppose was about 35% (if x – cost, than price =1.5*x; after changes 0.9*0.98*1.5*x = 1.323x so attainable mark-up is about 35%)
ROI = gross profit/(non current assets -depreciation+inventory) I suppose
Q1 I calculated total sales volume variance (Adverse) than Sales planning variance HDD Adv, SSD Favourable, as a whole adv, Market share variance adv (used standard contribution)
Q2 Breakeven 300 athlets 90000$ revenue, profit for 500 is approximately 24000 as I remember, described the change in fixed cost, variable cost is constant up to 400 athlets, than decline from 200 to 100$ per athlet
Q3 I calculated ABC full cost as I remember 70+smth and 80+smth and suggested that using ABS is time consuming and expensive and current price 110$ is in compliance with competitive market (lower than rivals’)
Q4 I was short of time and calculated current profit of each division and organisation as a whole and profit after accepting the offer. I defined that the offer shoul be rejected because of loss for the whole organisation and Division L’s capacity shoul be utilised to produce and transfer the same volume as it is, but transfer price can be negotiated to minimum external market price (37)
Q5 was a fail but I wrote that school 2 should be chosed (minimum loss of fee income, minimum incremental cost of decision, minimum profit foregone)
